Winner of the 2013 Booze Battle? Whiskey, Preferably Irish

Bottles of Suntory Holdings single cask whisky are displayed at its Yamazaki Distillery in Osaka, Japan.

Demand for pricier whiskeys, tequila and rum fueled U.S. alcohol sales last year, a spirits trade group reported, helping the category steal more market share from the beer industry for the fourth straight year.

The Distilled Spirits Council of the United States, also known as Discus, reported sharp increases in 2013 volume for Irish whiskey, Scotch, bourbon and Tennessee whiskey, as well as other so-called brown spirits.

That growth isn’t entirely surprising. Brown spirits have become more popular in recent years, courting favor with some consumers that have tired of vodka, the top-selling U.S. spirit. Distillers like Beam Inc. and Jack Daniel’s maker Brown-Forman Corp. are investing more to boost capacity.

Japan-based beer and soft-drinks maker Suntory Holdings Ltd. was recently so lured by the category that last month, it agreed to pay $13.6 billion to buy Beam, owner of Maker’s Mark and the eponymous Jim Beam.

Irish whiskeys had the strongest performance among spirits last year, with volume for a group that includes Jameson and Bushmills rising nearly 18%. Bourbon and Tennessee whiskey sales grew 6.8%, while vodka—by far the largest category—only reported 1.1% volume growth, Discus said.

Nearly half of the growth was for flavored whiskeys. Success stories in that part of the booze aisle has included Jack Daniel’s Tennessee Honey, which inspired other manufacturers to infuse their whiskeys with flavors like cider and maple. Distillers and industry analysts have said those concoctions have helped introduce new consumers to the whiskey renaissance.

And Americans aren’t alone in rediscovering their homegrown whiskeys. The trade group reported exports of bourbons and Tennessee whiskey exceeded $1 billion for the first time last year, sending more bottles to top markets like Japan, Germany and France.

Tequila sales jumped 6.6% last year. That category has garnered a lot of recent media attention: entertainers Sean “Diddy” Combs and Justin Timberlake both recently announced business ventures with booze giants Diageo PLC and Beam, respectively. And Diageo inked a deal last week to buy super-premium tequila brand Peligroso.

Those moves appear well timed, as the latest data shows tequila sales were strongest among the pricier categories.
Overall, Discus reported total U.S. spirits volume rose 1.9% in 2013 to nearly 206 million nine-liter cases. Revenue, which factors in price increases, jumped a more significant 4.4%.